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Nigeria’s debt servicing rises by 68.8% in H1

Published

1 week ago

October 7, 2024

The latest data from the Central Bank of Nigeria has revealed that Nigeria’s debt servicing reached N6.04tn in the first half of 2024, a remarkable increase of 68.8% over the N3.58tn reported during the same time in 2023.

This suggests that the Nigerian government’s debt servicing expenses were around three times higher than its staff expenditures throughout the review period.

The devaluation of the naira for international debt repayments is probably the primary cause of this steep increase in debt service requirements. The Federal Government is facing an increasing strain as repayment of debts takes up a substantial amount of its financial resources.

Personnel costs, on the other hand, increased 17.6% from N1.97tn in H1 2023 to N2.32tn in H1 2024.

Debt servicing is now nearly three times the government’s salary bill, according to this spending pattern, which raises questions about the sustainability of the debt profile of the nation and the mounting strain on public finances.

The overall amount spent on salaries in the first half of 2024 increased very slightly, despite the country’s rising cost of living.

Approximately 50% of the Federal Government spending in H1 2024 went towards debt service. The total amount spent by the government increased by 29.6% to N12.17 trillion in H1 2024 from N9.39 trillion in H1 2023. The increase in overall spending has led to a wider fiscal deficit, with N6.6 trillion in H1 2023 and N8.44 trillion in H1 2024 representing a 27.9% growth in deficit.

The government’s difficulty in managing its earnings and expenditures is highlighted by this expanding imbalance, which is made worse by the government’s mounting debt commitments.

Nigeria’s present fiscal trajectory may not be sustainable given the country’s ongoing expansion in the budget deficit and growing reliance on debt financing to make up for revenue deficits.

Recurrent spending, which includes staff compensation and debt servicing, increased by 51.4% from N6.72 trillion in H1 2023 to N10.17 trillion in H1 2024.

The burden of debt servicing, which currently accounts for a sizable amount of ongoing expenses, keeps the government’s finances tight.

In H1 2024, recurrent expenses alone more than doubled revenue, accounting for nearly 27% of retained revenue. This shows how much fiscal strain the government is under.

Capital expenditure, which is essential for long-term economic growth and the development of infrastructure, decreased by 25.3% from N2.68tn in H1 2023 to N1.99tn in H1 2024, despite an increase in overall spending.

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3 years after, Nigeria’s Belemaoil restarts Oil Lease 55

Published

12 hours ago

October 15, 2024

Ifeoluwa Dada

Following a three-year hiatus due to theft-related damage to the plant, Nigerian independent producer, Belemaoil Producing, has reopened operations at its oil block on Oil Mining Lease 55, the company announced on Monday.

In February 2015, Belemaoil purchased OML 55 from Chevron Corp. OML 55 is situated in a marsh to shallow water area, approximately 40 kilometres west of the Bonny oil export facility.

According to a statement by a Belemaoil representative, widespread oil theft from OML 55’s delivery line to the Bonny terminal forced the closure of the facility in 2021.

The block has five oilfields, which provide more than 70 million standard cubic feet of petrol per day and around 14,000 barrels per day, according to the business.

An official stated that the first floating oil storage vessel arrived at OML 55 on October 6th, signalling “a major milestone in the company’s efforts to restart production”.

Nigeria, the largest oil producer in Africa, is attempting to increase its crude production, which has decreased recently as a result of widespread theft and sabotage, which drove oil majors to abandon onshore drilling in favour of deepwater production.

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Kenya permits JPMorgan Chase to open representative office

Published

13 hours ago

October 15, 2024

Ifeoluwa Dada

The central bank of Kenya announced on Monday that JPMorgan Chase (JPM.N) had been permitted to create a new tab and open a representative office in the East African nation.

According to a statement from the Central Bank of Kenya, representative offices of foreign banks in Kenya act as hubs for marketing and communication for their parent banks and affiliates.

The announcement further stated that the JPMorgan Chase representative office will help to diversify Kenya’s banking industry and encourage trade and investment.

In an effort by the largest United States lender to grow on the continent, Jamie Dimon, the CEO of JPMorgan Chase, is scheduled to visit Africa in mid-October, according to a report published by Reuters last month, which cited four people with knowledge of the situation.

Within the next three years, the bank intends to renovate 1,700 existing branches and open 500 new ones. According to J.P. Morgan’s most recent financial report, as of the end of the second quarter of 2024, the bank had 4,884 branches.